That's my understanding as well. "farang" is from when the French were floating around in Thailand, and basically just means nothing more than "foreigner". If you take it more than that, good chance you're reading too much into it.

Then "falang" is just the Issan way of saying it, as pasa Issan replaces all r's with l's. No idea why, but that's just how folks from Issan roll.